Finance Minister, Ken Ofori-Atta has gone to Parliament to seek approval to enable the government to spend GH¢1.2 billion from the Contingency Fund in fighting the coronavirus outbreak in Ghana.
GH¢1 billion of that money will go into the Coronavirus Alleviation Programme promised by President Nana Akufo-Addo.
President Nana Akufo-Addo has instituted a Coronavirus Alleviation Programme intended to lessen the economic burden on businesses and households as the virus ravages on.
In his fourth address to the nation a couple of weeks ago, through which he announced a partial shutdown of Greater Accra and Greater Kumasi, as part of measures to contain the spread of the disease which has killed six out of the three hundred thirteen confirmed cases so far, the President said: “Fellow Ghanaians, we are in this together, and the government will stand by you”.
“We are aware that there will be discomfort and difficulties for all of us over the next couple of weeks. As a responsive government, we will continue to implement bold measures to mitigate the impact of the coronavirus on businesses and households and ensure that job losses are minimised.
“The Minister of Finance has been directed by me, to prepare, for approval by Parliament, a Coronavirus Alleviation Programme to address the disruption in economic activities, the hardship of our people, and to rescue and revitalise our industries. He will, then, immediately make available a minimum of one billion cedis (GHS1 billion) to households and businesses, particularly small and medium scale enterprises.
“The commercial banks are, in addition, responding to the Bank of Ghana’s 1.5% decrease in the Policy Rate and 2% in reserve requirement with a three billion-cedi (GHS3 billion) facility, to support industry especially in the pharmaceutical, hospitality, service and manufacturing sectors.
“We are providing additional relief, such as extension of the tax filing date from April to June; a two per cent (2%) reduction of interest rates by banks, effective 1st April, 2020; the granting by the banks of a six (6) month moratorium of principal repayments to entities in the airline and hospitality industries, i.e. hotels, restaurants, car rentals, food vendors, taxis, and uber operators. All other sector credit exposures will be reviewed on a case by case basis; mobile money users can send up to one hundred cedis (GHS100) for free; and a one hundred per cent (100%) to three hundred per cent (300%) increase in the daily transaction limits for mobile money transactions”, he said.
The President also said his government will bring the economy back on track post-coronavirus.
“Fellow Ghanaians, with the Bank of Ghana predicting a worst-case GDP growth rate scenario of 2.5% for 2020, should the virus continue to linger for the rest of the year, the effects on our economy would be dire. However, as we have demonstrated over the course of the last three years, where we inherited an economy that was growing at 3.4% and transformed it into one which has grown by an average of 7% over the last three (3) years, I assure you that we know what to do to bring back our economy back to life. What we do not know how to do is to bring people back to life”.
Mr Ofori-Atta tabled the proposal to Parliament on Wednesday and the Speaker referred it to the Finance Committee.
Speaking on the floor of the House, Mr Ofori-Atta said: “These are extraordinary and sobering times and we must respond with a deep sense of social justice so that our very humanity is not compromised”.
The money would be used to provide a stimulus package for businesses and households; give tax waivers and incentives to health workers and also advance soft loans to small businesses.
Just last weekend, President Akufo-Addo announced a loan package of GH¢600 million to micro, small and medium scale enterprises to support their operations amid the COVID-19 pandemic.
This will be done in collaboration with the National Board for Small Scale Industries, Business and Trade Associations as well as selected commercial and rural banks.
According to President Akufo-Addo, the facility will lessen the negative impact of the coronavirus outbreak on businesses.
He disclosed this when he addressed the nation on Sunday, 5 April 2020 regarding the state of the COVID-19 pandemic in Ghana.
The loan will have a year's moratorium and a two-year repayment period.
The Finance Minister estimates that the pandemic will cost Ghana GH¢9.505 billion.
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